Q4 2024 Roivant Sciences Ltd Earnings Call
Good day, and thank you for standby walk us through the ROI that fourth quarter of 2023 earnings conference call. At this time, all participants are in a listen only mode.
After the speaker's presentation, there will be a question and answer session to ask a question. During the session you will need to press star one one of your telephone you will then hear an automated message revising your hand is raised to withdraw your question. Please press star one again.
Please be advised that today's conference is being recorded I would now like to hand, the conference over to your speaker today any buyer. Please go ahead.
Good morning, and thanks for joining today's call to review our financial results for the fourth quarter and fiscal year ended March 31, 2024, along with a business update and I'll be buyer with right presenting today, we have not gone CEO of Raymond or those dialing in via conference call you can find besides being presented today as well.
A press release announcing these updates on our IR website at investors <unk> Com, we'll also be providing the slide numbers as we provided to help you follow along I'd like to remind you that we'll be making certain forward looking statements. During today's presentation. We strongly encourage you to review the information that we have filed with the SEC along with our form 10.
K for the fiscal year ended March 31, 'twenty 'twenty, four which we will file after market close today for more information regarding these forward looking statements and related risks and uncertainty and with that I'll turn it over to Matt.
Thank you Abby good morning, everybody and thank you for joining our fiscal year Mercury One go I can.
Starting with briefly on slide four with a run for what we're going to talk about and then what will go through the presentation.
So we talk a little bit today about where we are in the year, it's been an exciting fiscal year for us already even though we're only a couple of months.
What are what our plans are for the balance when he gave some updated immune a man who also filed their earnings yesterday and weren't doing a conference call I will review each representing a beta in non infectious uveitis that we generated during the quarter well talk a little bit about the ongoing became a launch actually will spend a minute or two on the renegotiation of some of the camera is fixed.
Obligations and debt that will take a significant amount of burn out of their cost of that program will spend some time on some upcoming catalysts. It on a financial update and then we'll go to the Q&A. Thank you everybody.
So I'll start on slide five and just to say 'twenty.
'twenty 'twenty four it was always planned to be a year of expansion and growth.
As you are planning for the future from us and that includes some updates that we'll talk about today, an exciting updates coming through the balance of this fiscal year.
Adam you to that where we have a bunch of important clinical data coming.
We're going to continue to advance the rest of our pipeline, including for example, the data we generated already in breakfast at NEP as well as data coming later, this year and sarcoidosis and others.
We continue to make progress at Derma vans with became a S. MBA now even breakout brick dermatitis with a <unk> date at the end of this year.
Speaker Change: We've continued that we can take the claims to grow in psoriasis, where were already on the market than.
We're very active in our late stage business development activities.
We're looking forward to continuing bright updates there, including on the program that we can license that haven't yet described which we'll talk more about later this year, it's not only one thing that we intend to do this year that I think we've made major progress on.
Communicate about is to finalize and communicate about our plans to return some capital to shareholders and as you'll know within the last couple of months, we announced a buyback program of up to $1 billion repurchase stock from Sumitomo. What we think was it was an attractive price.
Yeah. So on slide six before we get into the specific programs I will just say I am incredibly excited about the pipeline that we have today and the way that it is shaping up.
Obviously, the cameras launched atopic dermatitis will be an important event for us.
The idea of CRM franchise.
I've never felt better about that franchise than I do right now the clinical data that we continue to generate putting the data that we're going to share graves. Later this year underscores what we have as does the uniqueness of our data relative to what we've seen in the competitive landscape.
In recent days weeks and months and we just feel like we're in a really really strong position there and on top of that we've had and I'll talk more about this in a minute.
Very important type B meeting with FDA that set supports that.
The clinical development plan, Brian Beattie, 14, or two that really establishes it as our as our lead program.
And then.
Then we've got Brett, but sitting here, but our dual inhibitor of <unk> and JAK, one which now has.
Pretty obviously best ever demonstrated data at least in our phase.
Phase III study in non infectious uveitis, an ongoing pivotal program.
Nobody at my side as well.
A really great set of data on which to build.
An exciting franchise of our open autoimmune and then we have some other another readouts coming putting an O&M and sarcoidosis re later this year and some data and expect to have in our future plans in this undisclosed program that I mentioned.
So I'm Gonna go first into updates on immune events on slide eight.
So.
There's a lot of progress in the middle of that portfolio to BUNAVAIL put out at the earnings release yesterday with some of that highlighted I just want to hit what I think are really the key highlights here on slide eight.
First of all I have.
Perhaps most exciting to me we.
We have held a successful type b meeting with FDA on 14, O two which really covered a lot of the important topics around future development of <unk> two in the clinic.
And with that we feel fully on track to initiate fortified potentially registrational programs for quarter.
Speaker Change: That antibody over this fiscal year.
With that behind US, we're now comfortable saying <unk> is really our lead program in our view. It is we think a potentially best in class anti F <unk> antibody targa.
Target that we think is going to matter to a ton of patients and what we think we can deliver a lot of value.
Cocoa Mab development efforts are being optimized to point to inform 14th two development plans sort of serve us better and more robust.
Phase II studies in many cases to inform to inform what we can do with pivotal program unfortunate.
Notably because of the way those studies are designed we retain full optionality for registration if the data support it and then finally I think an underappreciated fact about 14 O. Two is that relatively recently, we've been issued a patent that gives us a composition of matter method of use a message manufacturing IP out to June of 2043, and that's notably before any use of patent term.
Extension so it doesn't mean that our lead program, we have a really long time here with a very exciting indeed.
With a lots of.
A lot of really promising clinical development underway.
That is obviously going to matter.
Broadly in immunology.
Overall updates that I think are important and positive in establishing what had been event looks like.
For the coming months and years there are some program specific update to the minivan laid out on slide nine one is correct.
Perhaps most importantly from my perspective.
We are now announcing that were planning to disclose detailed results from the total amount of studying graves disease. This fall together with an overview of our upcoming development plan as you know we've seen some of that data and are excited about it but a decline to share detailed thus far due to competitive reasons and we expect to be ready to share that data. This fall and we think it will set up for.
A lot of clarity on what we believe <unk> can be.
Topline data for battle in Mg as expected this fiscal year.
And notably Muniments expecting also to begin Registrational development in Mg with $14 two in the same timeframe. So again, we retain full registrational flexibility with battle, but we think MTS, an important indication and $14. Two was an important enough program that it deserves to be developed in Mg.
Have you guys decided to extend the run time effectively of the CIA study in battle by about two quarters. Prior to unblinded period. One data is really is to optimize the potentially pivotal plans for 14th to EMC IDP.
Speaker Change: And in essence to treat the this sort of period one.
More as a robust phase II before chemo too.
To get as much information as we can about dose response, that's in particular.
By trying to make sure that we continue to enroll.
The most severe patients into that study and really understand the profile of that patient population and finally, we are on track to.
Produced the potentially Registrational data in Ted in the first half of next year and that would be a first in class opportunity and another indication, where we think it's relatively clear that deeper agg suppression will produce better efficacy.
At that point I want to underscore again on slide 10, and this is not a new slide I think it's a really important framing point to keep in mind as we generate data to come this year.
And that is it has been very consistently shown across different anti F antibodies across different indications that deeper agg suppression matters, it's been true at a patient level in Mg.
Ross our competitor programs at our Janssen J&J, it's been true to a.
Degree in our own direct Idc's data, we stated and we will show better. This fall that it is true in the data that we are generating graves disease. It's been true in the data that UCB has generated an ATP and it's been true that patients with greater agg reduction have correlated with greater auto antibody reduction in greater clinical response, and J&J is RNA data. So we say it.
Over and over again that we think for Q2 was the best in class drug what I want to remind everybody. The data we are generating this year in particular in Mg This fiscal year.
Is among the very important possible proof points to demonstrate the deeper agg suppression could yield meaningfully better clinical efficacy and we think there's a lot of support of evidence.
Suggest that dataset matters and then the last one I want to underscore on slide 11, as we get closer to the fall.
We're excited about graves disease, it's an indication obviously that requires a little bit more imagination that mg because there is not yet any approved product, but that is also our other than sort of any thyroid drugs.
That is also that's also the opportunity for US is that it's real white space, where we can deliver a significant clinical benefit to patients with high unmet need what we've said so far is that results from the initial cohort of patients in that ongoing 24 week trial meaningfully exceeded our targeted response rates.
And that we saw a numerically higher responses bolt for dose tapering and discontinuation in patients at $6 80, as compared to patients with 340, <unk> further supporting our mortars better hypothesis.
And so and also that we continue to demonstrate best in class Agg reductions have been at 81%.
Meaningfully greater than what we saw at 340 milligram dose and as good or better as anything we've seen from frankly any competitor inside or outside of our class.
And then finally as I said, we expect to produce detailed data along with the development plans.
This fall to underscore where we are and graves to give people a picture for what that's going to look like in the future as an important indication for the program.
So I'm sure there'll be questions on Brinavess will come back to a bank and move to other elements in the pipeline now.
I'm going to take a few minutes to.
Recapitulate or go over some of the data that the private team presented on our call earlier. This spring on Brexit in non infectious uveitis because its an opportunity. We think is really exciting it's a larger market and we think most people appreciate and frankly, we're really proud of the data that we've generated to date so uveitis.
As.
Is not a widely discussed indication obviously in our industry. There is not a lot of approved therapies. It is however, the fourth leading cause of blindness among working age population.
It's a significant severe disease with difficult morbidity use there are and this is an updated claims analysis that we've continued to refine about 40000 patients with non inferior niu on biologics, which includes which includes <unk>, which is the only approved therapy as well as a number of off label therapies and we continue to see rapid growth in <unk>.
Scripts. So we are we are.
Excited about the already existing biologics population thats against the backdrop that we'll talk about the second.
Therapies do not work, particularly well and so far what we've seen in the phase III data looks meaningfully better.
And notably there are no competitors currently in phase III in uveitis with only a limited number of competitors in phase II. So we didn't get any kind of orphan price point with our kind of differentiated data. This is a multibillion dollar peak sales potential opportunity even in a post biologic biologic refractory.
Population with additional opportunities in a broader non interior population. This is on slide 14, I think interestingly, we feel like Niu is a little bit where something like HSA or even Ted was a few years ago, where there is an understanding of the population, but again as I said earlier this is.
Imagination is required and so people don't fully see the forest for the treatment, but if you look at the overall prevalence of the disease. The prevalence in our relevant sub population. If you think about whether this is a sort of TNF approved market.
Think about the level of morbidity of the disease and the size of the competitive opportunity or the number of competitors are against us.
This is an indication that ought to get the same level of attention as other severe diseases, including something like Hs, but also including something like Ted where where the need is high where it's another ocular disease and whether it's as a reminder, docs just have no tolerance for things like ocular inflammation and patients really want good treatment options.
So the study that we completed that we've now put out on slide 15 was a phase II randomized double masked dose ranging study that study both 15 milligrams and 45 milligrams.
And the endpoint.
Speaker Change: I think all treatment failure rate, which is what it sounds like it's patients who have.
Where youre worsening or non improvement.
Of disease, while on therapy.
<unk> background point of note on slide 16 that we talked about on our prior call. The way. These studies all work because there is so little tolerance for ocular inflammation. If these patients show up with disease and are put on a high dose first of prednisone, which is then taper quickly and we used a quite aggressive steroid taper meaningfully more aggressive than the Humira studies.
In order to give our drug the hardest test in phase III, so that we understand what we had.
And the goal here is to be able to preserve or improve benefits.
Even after the steroid taper, which is sort of the name of the game here into the basis on which Humira was effectively.
So on slide 17, you can see the data I know, we put this out before but it's a slide that I really enjoy looking at that.
It is really really good data.
By our own measure on the left side here, which includes treatment discontinuation on the treatment failure calculation.
<unk> had about a 62% treatment failure rate and our high dose we had a 29% treatment failure rate so.
Effectively twice as twice as low.
And.
And a really exciting result.
On the right hand side, you can see the data as Humira presented in their label.
Are they excluded treatment discontinuation rates of treatment failures. So they had about a 50% or even failure rate. There, we had a sub 20% or even failure rate and a nice dose response both on this.
And on the other sort of sub component endpoints that gives us some confidence that this data should be translatable to a placebo controlled study.
Yes.
One last point on the data on slide 18.
I think there is a.
This question is like how to think about this maybe put another way.
Humira after about six months.
Half of Humira payer trapped for about 11 months half a year of patients had developed macular edema.
For about six months half of placebo patients that develop macular edema and these are markets that didn't have macular edema baseline. We had 10 such patients that are 45 milligram arm and none of them had macular edema by week 24.
Speaker Change: And then of patients who came in macular edema.
Three of those patients had resolution of their macular edema by week 24, whereas in Humira. It was about 22% and resolution. So again, just another way of thinking about this data underscores the uniqueness of our dataset and the opportunity we have.
I think on slide 19, just to reiterate this is a large commercial opportunity to support a differentiated product profile.
With a real early treatment option for physicians look to intervene aggressively to present prevent blindness and if you call. These docs I think the thing you'll find over and over again is the tolerance for inflammation with <unk> is basically zero.
In our opinion there is really no Eric agents certainly no not just the regulations that have shown an ability to reduce or mitigate ocular inflammation.
As well as perhaps it in the past so far so we are incredibly excited about this opportunity we will continue to talk about it.
We're preparing for a pivotal program to begin later this year and we'll share more about that sign a timeline as it comes together.
So now I'm going to transition to be camera on slide 21, which kept the results for the fiscal year to about $75 million in net product revenue.
Gross to net yield of about 24% for the quarter.
We expect those numbers to continue to improve and grow over time.
We'll talk more about that guidance.
As time goes on and we're sort of expect steady progress in psoriasis.
Notably as we get closer to the end of this year, we feel like we have a strong foundation for a quite rapid launch in atopic dermatitis first of all we have a proven ability on slides on slide 22 to drive switches from standard of care just based on the existing became a patterns in psoriasis and 75% of the early adopter healthcare providers in a day.
Once rates.
Novel mechanisms early have already been engaged within our psoriasis launch. So we know these docs and.
And this is against the backdrop on the right hand side of the topical market in <unk> that is frankly growing a lot faster than the topical market in psoriasis with many more scripts to begin with so.
We think the AG market dynamics are meaningfully different than the psoriasis market dynamics, and we think our data set which we've talked about before I won't spend a lot of time on today as well as the sort of commercial infrastructure that we've built set us up for an exciting possible launch in atopic dermatitis again as a reminder, our <unk> date is in the fourth quarter of this year.
One important update that.
Respect is not high on People's minds is that Mcdermott had some so that royalty obligations that came from the early acquisition as the program is actually represented a relatively meaningful portion of our burn on dura vent.
During this prelaunch in sort of early launch period, we have successfully renegotiated those obligations with the Counterparties that includes Nova question, a number of other lenders.
And this renegotiation has reduced our potential payments by up to about up by about $300 million.
Of which about $225 million, we expect to realize over the next three fiscal years. So.
Pretty meaningful reduction in the expected burn at Derma Vance.
Overall gets to one of the theme that all hit in a minute, which is that we are focused on maximizing the longevity of our capital and our ability to deploy it either on buying our own stock or on investing and valuable programs to the maximum extent possible and so we're really focused on in this period, where we are cash rich being as dogmatically efficient around capital.
As we possibly can be in this renegotiation.
Certainly a part of that commitment.
Speaker Change: So we have we have.
Speaker Change: Some some pretty important catalysts coming on slide 25.
We're through at this point the exciting data from representing there were through the SBA filing for the camera.
The upcoming graves data from <unk> from <unk>.
<unk> Avenue and overview of our <unk> development plans. This fall we have topline data from our phase II trial in sarcoma that mill now that the fourth quarter and then by the end of this fiscal year, we have upcoming top line data for myasthenia gravis as well as potentially that data from period, one of the phase III study in CIP.
And if you're going to expect to initiate fortified potentially registrational studies for 14 or two on the back of the recent positive FDA interactions.
We also this quarter on 26, as a reminder, announced this $1 $5 billion share repurchase program, including our repurchase of the entire sumitomo stake at a price of $9 10, a share we continue to be excited about that commitment that we have that program outstanding.
We will use it to buy back stock at attractive prices I expect we will use it.
Coming months to be to be thoughtful around around continuing to take advantage of that opportunity and it's a way that we expect to be efficient with our capital and frankly.
Think our shares are I will just say attractively priced at the moment.
Yes.
Sure.
On slide 27, not expecting to spend a lot of time on that have not spent a lot of time on it historically, but we continue to have some really exciting work ongoing and early stage drug discovery in this case it advanced AI, where we have a set of tools for.
Probably the best out there capability for modeling and predicting protein protein interactions.
We really do think we may be the best in the world with this thing.
And notably I think this is clear to most.
We have mostly been funding our discovery efforts through external partnership and external investment and that continues to be true advanced AI, where we've recently.
We entered into partnerships with Bristol Myers Squibb, and blueprint that are both important for developing our capabilities and are providing a significant portion of the capital required to engineered gas spent AI.
Finally, two other business updates on page 28, one is something that we get a lot of questions about over time, which is our patent litigation with Madonna.
In April of this year as many of you know the court agreed with with our proposed constructions for.
Most of the disputed terms against Madonna and our markman ruling, which sets us up with a clearer with a clear set of unfavorable boundaries. The playing field as we get through the rest of the free trial disputes through the rest of the year and we are in the midst of.
That's an expert discovery.
We are expecting.
Speaker Change: Filing a summary judgment motions late this year.
The trial date less than a year from now so so looking forward to that and then finally.
<unk> has fully enrolled at this point that we've announced publicly our phase III potentially registrational study for an old Avon's sarcoidosis, we're expecting that should read out in the fourth quarter that has a high SKU opportunity that I think most people have not paid a lot of attention to historically will talk more about it as it gets a little closer and especially as we generate that data, but needless to say if that is successful it would be a potentially.
First novel therapy for pulmonary sarcoidosis, which is another one of these large untapped orphan disease markets.
So finally, I'll wrap up here with a financial update I won't go through all of the numbers on slide 30.
I'll point out a couple of things here, one is that our net cash utilization for the quarter was $108 million, which the function of a number of things, including streamline burn and the.
The fact that we generate meaningful interest in our cash balance. So we're excited about that.
Part of our significant commitment year to being efficient with our capital as we focus on deploying on the most valuable opportunities.
We ended the quarter again this was prior to the Sumitomo repurchase with $6 6 billion in cash and I'll point out that the carrying value of our debt. In this 10-K does not yet reflect the renegotiation with <unk>. So you will see that renegotiation reflected on our 10-Q for the 630 financials.
So with that ill leave off on slide 32, and just say it is to everything we've talked about Mcdonald's perspective, there's just a bunch of interesting data in a bunch of opportunities coming in and all of this is in addition to pipeline growth for our for our pipeline.
We're excited to talk about that.
On an ongoing basis and in some cases as soon as it happens so stay tuned.
Really excited about what we see in that opportunity set.
I've never felt better about that either in terms of the space of opportunities that we may be able to access with that I will wrap up the prepared remarks portion of this call and I will hand, it back over to the operator for Q&A. Thank you everybody for joining this morning, and I look forward to your questions.
Thank you as a reminder to ask a question. Please press star one one of your telephone and wait for your name to be announced.
Your question. Please press star one again please.
Please stand by while we compile the Q&A roster.
Our first question comes from the line of David Risinger with Leerink Partners. Your line is now open.
Yes, thanks, very much and thank you for all the updates so.
I just wanted to ask a little bit more about the <unk>.
Total maps readouts. So could you. Please add some more color on what was surprising and let's see.
Speaker Change: The <unk> trial.
And.
<unk>.
Whether your level of confidence for that asset in CIB peers.
Changed.
And then also if you could discuss the slight delay in the Mg readout for <unk> that would be helpful. As well and then separately, Matt you mentioned.
Speaker Change: The.
The very unique modeling capabilities you have for protein protein interactions is that solely for.
Facilitating.
Larger drug companies.
Drug development via partnerships or.
Would your organization ever design at selling drugs.
Yes.
With those capabilities and patented drugs to be developed by Rory there thanks very much.
Yeah. Thanks, Dave those are great questions and I appreciate them.
I'll start with immuno great questions first of all I want to be clear, we haven't seen any of the data for either <unk> and Mg orbital FMC IDP and certainly the biology continues to be supportive of the competitive data continues to be supportive. So I would say there is absolutely no change in our level of conviction around what the total NAV or anti <unk> antibodies can do.
And I think the main the main thing behind these changes, especially on the <unk> side, we've actually increased conviction in what we think <unk> is going to be able to do including increased conviction based on the regulatory interactions or going to help move really quickly with that development plan and so a desire to get the most possible information.
Speaker Change: <unk> out of the <unk> study in order to inform that plan as it falls into place and notably just won't create any delays with the <unk> study.
That.
Would have begun.
Sort of by the end of this fiscal year effectively anyway look I.
I think the short answer to the CIP question Youre asking is.
I think we believe we are successfully enrolling quite severe patients.
These studies are complex and it's hard to know exactly and we don't have.
That data, but we continue to see some discontinuation that this has been observed in the organics program as well. This is an early learning of theirs.
Frequently in patients who either have not yet been dosed with <unk> only had minimal early dosing of a kilogram. So nothing to do with the total now but these are exactly the patients who are severe.
And active and you want in the study and so we want to make sure. We have enough of these patients had enough data from these patients frankly, specifically to understand the dose response that will generate in period, one so as to look for.
A proper design for fortino, too, where we can get a maximum efficacy benefit from that program. So that's what I'd say on <unk> overall I think that the.
Small delay to the extent there is one in MG is really just a function of like getting a little bit closer to full enrollment on that study and understand exactly what the patients are coming in I don't know, if there's anything particularly material in that timing shift and we haven't finished enrollment yet so in theory, it's possible that can still be on time and you got to see what that what that looks like.
Sure.
On.
On the Wednesday, I point, Yeah look it's a great question. It is not something we talk a lot about these days certainly the reason that we continue to invest time and energy.
And the other drug discovery events that we've built is because we see pipeline optionality for ourselves and value and continuing to invest in these technologies and frankly do you think.
The sort of predictive generative modeling a protein protein interactions certainly we've been working on for years, it's starting to get more billing now because it's something that's helpful. Three has been able to do to some degree.
And we think it's going to be incredibly important obviously for things like where we've historically spent time and effort hetero by functional in particular molecular glues for protein degradation, but also for lots of other systems that involve protein protein interaction. So it was I think the short answer to your question is while it is currently largely externally funded through partnership and other things absolutely we constantly reevaluate.
<unk> to develop an advanced programs for our own pipeline using those technologies.
Great. Thank you very much.
Thank you.
Thank you.
Our next question comes from the line of Louise Chen with Cantor. Your line is now open.
Hi, congratulations on the progress this quarter and thanks for taking my questions here. So I wanted to ask you. How you think about the peak sales for atopic dermatitis and the pace of the uptake of that potential approval. Later this year and then do you have any updates on your capital allocation strategy I know in the past you kind of broke out what you thought about share repurchase M&A.
Internal investment any thoughts there. Thank you.
Yeah. Thanks, Louise So those are both great questions. Thank you for listening this morning.
On a D a.
I would say look I think.
Speaker Change: We are excited about the opportunity we continue to reiterate we feel like it has true blockbuster potential.
<unk> is a big market it is qualitatively different in size and dynamics from psoriasis.
And we think it'd be camera has.
Phenomenal data that stacks up even better competitively data in psoriasis. So unquestionably, we think <unk> has the potential to be a blockbuster market.
I think it has the potential to ramp faster than psoriasis has ramped that's true for a number of reasons, it's true because the market dynamics of the market is wrong, because theyre more scripts, it's true because many of the docs now have familiarity with became up on the psoriasis side. It's true because there are other novel topical that a condition docks to write things other than other than steroids.
And so for a variety of reasons. We are really excited about the AG market dynamics I think we have a potential for a reasonably rapid.
Blockbuster potential Brian.
So enough said on <unk>.
On the capital allocation strategy point I think we've obviously made significant progress here with our share repurchase authorization and we expect to continue to use that authorization to be.
Speaker Change: Opportunistic and focused.
Returning capital I would say overall, the broad buckets that we had laid out before remain unchanged. So about about $2 billion of BUNAVAIL total for our existing pipeline a lot of that focus on the unit and as of now about $2 billion. These are really round rough numbers focused on mostly clinical development related to newly in licensed programs in Wuxi.
Speaker Change: Some great things on a rocket and then the remainder 70 should sort of narrowing those error bars down.
Available forward returns or share repurchase et cetera.
Many months and years.
Speaker Change: Those are both related questions.
Thank you.
Our next question comes from the line of Allison <unk> with Piper Sandler Your line is now open.
Hey, good morning, Thanks for the update today and thanks for taking my questions.
Just first following up on the main events strategic update.
We are prioritizing searching.
If I could talk on that.
Can you just talk more help us understand what went into that calculus.
Changing competitive landscape.
Or after the FDA meeting something else and just you know why you're making that decision now and just help us understand if there are any scenarios in which the telco map would be filed for approval and Andy indicate any indications what would that look like and then just separately on PREPA sitting at kind of a bigger picture question I think we hear your exciting.
Matt.
And the potential market size in Niu.
<unk> and other indications.
What gives you confidence that the current ownership structure of pricing.
Is optimal.
Scenarios, where you would be open to revisiting that with Pfizer just help us understand your thinking there. Thank you.
Yeah. Thanks Ali those are both of those are both great questions as well and I appreciate it.
<unk> first of all reiterate nothing about any of these updates reflect any loss of confidence or change in conviction around debacle Nab, which is a great drug we don't have the data at <unk>. So I can't say what is going to look like but what.
We think is a compelling opportunity and to be clear.
We have absolute flexibility to launch it in any of these indications.
Data is supportive and that is whatever decision, we make will be a data driven decision at the time.
I think the update around <unk>, which I think some people think is may be a long time coming.
For us I would say for a number of different reasons some of that related to what we've seen in the graves data and our increased enthusiasm for what $14 two.
Speaker Change: It looks like we have always been enthusiastic, but obviously until you see it in patients.
Don't know what you've got and then frankly, the FDA interaction a type b meeting was important because it allowed us to discuss many of the issues around the piece of <unk> development with the agency and get comfortable that we're going to be able to move quickly there and I think that's a really important step and I think it sort of affects how we think about the franchise with having a clear understanding around.
The speed with which we're going to be able to develop working with theirs I think those are sort of the.
The main factors that said again I think we're going to make a data driven decision on the total lab in various indications and I think the data for example in MG dose response is going to be both informative for the potential profile of battle as in Mg drug and also informative for.
<unk> looks like and again, we have at this point, increasing and high conviction that <unk> has the potential to be a true best in class antibody.
Class that is in an area of biology that is.
Obviously growing with every passing weekend lunch.
Thanks Alan.
Alright, and then on Brexit.
Look I think we are really excited about what we're doing with represent now Pfizer is a good partner, we talked to them all the time about a lot of things.
If we continue to develop representing over 70 525 partnership with Pfizer that'll be great, but I would say everything is certainly on the table from our perspective, and we would be.
I'm certainly happy to own more of a represent new that we would be happy to own more of a number of our programs just given our level of conviction in the data.
Speaker Change: Thank you.
Thank you.
Our next question comes from the line of Gordon Johnson with Goldman Sachs. Your line is now open.
Thanks, and good morning, guys.
Maybe a question on the path to profitability comment I think for the press release I guess, what are the assumptions that factor into that comment and is this rely on it for thomasville sales from other products, which ones and then how do you think about that comment when you when youre contemplating potential deals would you sort of forego path to profitability.
In order to acquire something interesting or is that a priority over over btu.
Speaker Change: Yeah. Thanks, that's a great question, well I guess I'd say a few things one is obviously predicting profitability for a business like ours is a challenging exercise.
That said.
A little bit of everything goes into the forecast in the sense that there is sort of probability weighted estimates for a variety of our programs and some of them like the camera have high probability associated clinical success and some variability in the commercial forecast. Although again, we have a lot of enthusiasm for <unk> some of them have lower probabilities of success.
But all of them are.
Or sort of in there to some degree.
The second thing I'd say is.
I would feel pretty embarrassed if I couldnt sit here today, and say that with $5 $5 billion, we could be profitable.
Or that with five $5 billion, we can do BD and also be profitable so I think.
I believe both of those things I believe are comfortably.
That having been said.
We are going to make.
Ruthless economic decisions about everything in our portfolio and around new opportunities and I think I guess it is.
Imaginable that our program could come along that would change that picture.
Don't foresee such a thing, but if it did you would have to believe it will be a really good program worth investing that kind of capital and so I don't think its like sacrosanct, but I also feel like we have enough capital on our balance sheet right now to ensure we can do everything we need to do.
Thanks, Tom.
On the deal front I guess, we had expected maybe some deals earlier this year.
Maybe you could talk a little bit about what you're seeing in terms of those conversations.
Considering kind of sourcing ideas versus executing on a final deal.
Yeah, perfect I think the answer is.
And we've said this before and my view on it is either unchanged or slightly improved this is among the best or the best deal environment, we have ever been in that's true because of the shifts and changes going on at Big pharma, It's true because the kingrey, an explosion of new biology, and B cell immunology, it's true.
In a lot of different ways.
And we see opportunities, we like in immunology, and cardio metabolic disease in Pulmonology and rare and orphan disease in lots of different areas. We are in all stages of discussions from economic negotiations all the way down to the idea generation.
And I expect there will be multiple fruitful elements coming out of those discussions in the coming months. So look overall, we feel tremendously.
Speaker Change: No.
Tremendously lucky to be in the position that we're in at this moment in time, and we're working really really hard to capitalize on it expediently, while making sure that we bring in the right programs not just to bring something in but for something that we're excited to own forever.
Thanks, Brian.
Thank you.
Our next question comes from the line of Brian Cheng with J P. Morgan. Your line is now open.
Hi, Matt Thanks for taking our question this morning.
Just first on the back of your FDA meeting.
Can you give us a sense of how the rollout of your plan of four to five potentially pivotal program will look like over the next 10 years.
And what was the key tech.
Speaker Change: The type B meeting with the FDA.
What's the type B meeting for all four to five programs and I have a quick follow up thank you.
Yeah. Thanks.
Maybe I'll hand, it over to Frank I'll, just say, we haven't commented, which division of FDA, we met with them the type B meeting.
Frank do you want to do you want to take this one.
Brian: Brian just want to make sure.
You said was comment.
Comments over the rollout over the next 10 years did you mean over the next 10 years or the next 10 months. The next 10 months.
King.
<unk> programs.
By March sorry sure.
Sure well I think you can imagine that they will rollout.
Towards towards the later part of the year.
And.
And we've been progressing them reasonably in parallel.
There'll be some operational staggering of those things as they rollout, but we.
Brian: Focused on indications, where we think we need to have a foundation.
In the space and also where we can do some novel things.
Look forward to talking about a little more with a little more specificity exactly what those are later in the year.
Great and then quick follow up.
Bio havens update on the <unk> data yesterday just.
Just curious <unk> and Andreas Zahn on their data.
Speaker Change: Thanks for taking my question.
Thanks, Brian look I think.
This is important biology, there's patients that are in need.
Our general our general hope is to root for our competitor successes, because a rising tide lifts all boats.
It's obviously the investors were disappointed with by way of an update yesterday I don't think that's a controversial comment.
Look I think the main thing competitor data generally over the past few months has underscored for me.
F CRM as a target has gracefully cleared a fairly high bar.
I think you cleared it so gracefully that lots of people and other mechanisms I think assumed the borrower was lower we didn't totally nowhere it was because the bar doesn't reveal itself when you clear right, but I think what we're now seeing is challenging this.
Biology is challenging that predicting the translation of this biology from from animal models to humans is challenging and Theres just a lot of work to do so so look I think thats. The main the main thing that competitor data updates have shown us in the past few months is that it's hard to count your chickens here in the <unk> is really the only mechanism that is clinic.
We validated in many patients across many indications to be able to deliver in this category of biology, and I am sure there will be others like SCR is not the only mechanism that will succeed but I'm also sure that it will take time and effort as it did with FTR and.
For that to materialize. So maybe that's what I can say much better data.
Speaker Change: Great. Thank you Matt.
Thank you.
Our next question comes from the line of Yaron Werber with TD Cowen. Your line is now open.
Great. Thanks Sue.
Maybe I have a couple of questions.
First one just on graves disease can you give us a sense of how much data are we going to see in the fall is it going to be the full data is it going to be at a medical presentation.
And then secondly from that study do you have enough will you have enough sense in dose response to <unk>.
Be able to design, a pivotal phase III and maybe just on <unk>.
This is a drug you really have not talked much about <unk> positioning as an upside potential so to speak without a lot of downside to the stock, but how strongly do you feel about this mechanism sort of anti GM CSF for sarcoidosis. Thank you.
Yeah. Thanks your own.
Personally and Frank I'll ask if you have any feedback through I think the short answer is we're going to share a fairly comprehensive dataset. This fall that will youll I'd say like our performance and something about dose response and the performance of those arms across different measures for these patients.
Speaker Change: And.
This design, which I think you know was.
Patients were started on a dose and then move to a lower dose after certain number of weeks of therapy with specifically designed to allow us to see a dose response test the lowers better hypothesis and just answer questions about the pathophysiology of <unk> patients.
I believe this study design is sufficient.
For us to move in the design of pivotal from here a bit of a program from here Frank anything you would add to that.
No I think it's well said.
Great.
And then.
On the mill a mab.
<unk>.
Look this is different than studying CRM, even in a novel indication in the CRM is validated biology, we understand exactly how it works.
And these diseases are relatively straightforward we in many cases causally linked to auto antibodies, obviously sarcoid is a complicated multifactorial disease.
Said macrophages.
Mainly play a role in the formation of Granulomas in.
<unk> and <unk>.
<unk> has balanced with elements to that.
But the success is still comparatively low just given the biology and the nature of the disease, but if it does work its a huge commercial opportunity.
And so I think we feel we felt pretty good about it.
Thanks, Ron.
Thank you.
Our next question comes from the line of Jonathan <unk> with Guggenheim. Your line is now open.
Hey, guys. Thank you for taking my question question on the immuno in front.
So there are indications like myasthenia gravis, and Ted where you have a kid would go program ongoing with 14 in Hawaii.
Could you talk about what are the key metrics for you to decide if the data are positive like you will file a BLA. All you will advance 14 are too.
Or could you do both of them.
Help us understand because I think the one question that we generally get from investors that look you have two assets.
<unk>.
On one hand, youre seeing even a really advanced 14, two across all indication, but you do have to deal with these two pivotal studies ongoing are not there suddenly in Russia that care about.
On the markets.
Cause so help us understand how those decisions will be made.
Is there a potential that you will file the BLA.
Speaker Change: <unk> and Ted if the data are positive and then how should we think about 14 or too for those at least two indications. Thank you.
Yes. Thank you thanks for the questions, they're good questions obviously relevant.
I think the short answer is we are going to make ruthless data driven decisions around whether or not to file that or any of these indications. These studies continue to be designed as a potentially registrational studies. There is no change to any of that.
If the data are supportive of the attractive commercial profile. We will we will launch the program I don't think that that would stop us from parallel prosecuting registrational development <unk> given the profile. So I think to answer your question bulk is definitely possible.
I think what we're trying to do here is.
In indications, where we can catch up we would obviously rather be out with $14 two with its profile given where we are and so we're also just trying to set ourselves up to the maximum likelihood of being able to get to frankly get to first store in the from pack everywhere that we can.
Races, like Mg and <unk>, where our <unk> plan. We are ahead of us we're going to evaluate our positioning based on the data, we see and make our make what we think will be a smart decision at the time.
Okay.
Thank you.
Our next question comes from the line of Douglas Tsao with H C. Wainwright. Your line is now open.
Hi, Good morning, Thanks for taking my questions, maybe Matt just on CIT.
Just curious when you think about the differentiation we saw.
In your study and you look ahead to phase III and I'm just curious do you have.
Thought in terms of where you wanted to lean into in terms of that differentiation. Obviously, you used a shorter steroid tapering period.
In your study I'm, just curious would you want to replicate that or would you, perhaps just sort of go with the same.
We're tapering that they used in the.
The Humira studies, and which would potentially hurts should in theory give you even better a treatment failure rates. Thank you.
Yes. Thanks, Thanks, Doug that's a great question and obviously happy to talk about.
About <unk>, we're really excited about it but I think given how well the study works.
And given that a steeper steroid taper ought to continue to provide good separation or perhaps better separation from placebo. When we add will into a study I think given how low our tier I suspect we will be in time to continue to continue to go differentiation beyond that not shutting down perspective oral was obviously a big.
Advantage for Brexit and dividend although pills.
Pales in comparison to the potential treatment.
Efficacy benefit.
Look I think I think what we're looking for at this point is parsimony, who were looking for.
Fast efficient study that will in an ideal world replicate if we can just replicate what we saw in phase II or even come close to replicating what we saw in phase two I think basically everything else is going to sort itself out.
Okay, Great that's really helpful.
Thank you Doug.
Thank you.
Our next question comes from the line of Andy Chien with Wolfe Research. Your line is now open.
Hey, good morning. Thank you for taking the question. So Matt the question is on <unk>.
The optionality with our particular map. So you have four indications on the table.
And and let's say hypothetically, we know the data from MG we know the data from the CIB. The data is that but talk about is equal or slightly better than zipcard on efficacy.
Just curious if you can rank order.
The four indications, which ones are you more excited about which ones are you less excited about because not all of these are the same right because some indications are more competitive some getting some indications of safety is more important if you can talk about like where each indication stands for Taco night that'd be great and then a follow.
So up on the <unk> Thomas So I know you have your MBR Rx data here on this slide can you talk about like the dropoff like how sticky is this business is rising right now how much do you lose over time to <unk> and biologics. Thank you.
Thanks, Andy.
Yeah.
I was tempted to throw this question to Frank because it's a fun curve ball, but what I think can I rank order the indications probably not.
I, probably can't rank order the indications, especially because.
Setting everything else aside I think the.
Bordering and the commercial plans will depend on the data that we generate in the studies.
All of which are designed to be interesting. Obviously these indications have different price points, obviously, they have different competitive environments, but rather some factors, but if our data in Mg is extraordinary and handle it beats. The competitors I think that's a pretty interesting picture. So there's lots of different optionality here and I think the reason I call. It optionality is precisely because.
We're going to have to wait and see on the specific.
Profile.
<unk>.
Yes.
Yeah.
So maybe that's what I'll say about battle.
On the <unk> camera.
Look I think there is a group of docs that right. This product that had been writing it since the beginning of launch that are excited about the products that right a lot of it that represent a pretty significant bulk of the prescriptions bluntly and do what you call them and ask about the products. They love the product and so in that sense I think it's steady dermatologist promotional sensitive we.
We'll have to get out there and be out there. There's obviously competitors will also talking about their product the landscape shifts constantly but in general I'd say, the docs, who love, Nevada keep writing the product and one of our.
One of our biggest opportunities is to increase that set of docs and get more docs et cetera that are using it and billing practice that's been hard because many of these docs have a real steroid habit, but breaking that habit and getting them to write dicamba instead represents a big opportunity even in psoriasis and obviously the aging dynamics are exciting to contemplate.
Speaker Change: Thank you Matt.
Thank you.
Next question comes from the line of Dennis Yang with Jefferies. Your line is now open.
Hi, Good morning. This is anthea on for Dennis two questions from us.
In terms of BD with 14 million dollar upfront deal done last year, what's the gating factor for disclosing this and could you just comment on.
Details from this program.
Then on sarcoidosis and could you talk about what you're measuring in the phase two what's the positive result.
You'll have to do another study thank you.
Thanks I appreciate the question.
Do you want to take the question on <unk> and the new program.
Sure Yes.
Really the only reason we haven't talked about yet is purely as a competitive strategic.
Consideration.
That's all I had thank you.
Yes.
Sure.
Speaker Change: Yes.
We've said historically there is a big pharma company with a another program in the same mechanism is a different indication I think we were waiting to get our own study up and running it will be announced later this calendar year.
<unk>.
Speaker Change: On Sarcoid.
Yes.
I think.
We haven't given a lot of guidance on exactly what we're looking for there I do think it's a relatively straightforward we'll know it when we see situation. The competitive bar is low there are not a lot of other programs.
The.
The primary endpoint of the study is effectively proportion of subjects requiring rescue for worsening of disease, but we're also looking at SBC were also looking at time to rescue.
Also measuring various sort of steroid taper.
Ability to achieve steroid taper I think all of these are relevant to the treatment of these patients. So.
More to say.
Once we have the actual data.
But.
Extended the possibility of delivering a new treatment option for these patients.
Thank you.
Speaker Change: I'd now like to turn the conference call back over to Matt <unk> for closing remarks.
Great.
Thank you everybody again for listening today. Thank you to obviously the entire <unk> team put together resulted it made everything happened in the first vessel months. Thank you to our investors and supporters that you'd perhaps most of all or at least in a significant way to the patients and investigators who make our trial happen and who allow us to continue to generate.
Data.
We are tremendously excited about where we are in the business I've never been more excited about our SCR and franchise than I am today.
Many other aspects of our pipeline as well and I look forward to catching up again soon on scheduled or unscheduled future conference calls have a great day. Thank you.
This concludes today's conference call. Thank you for your participation you may now disconnect.
Goodbye.
Okay.
Okay.
Okay.
[music].
Okay.
Okay.
Okay.
[music].
Okay.